The government is launching an inquiry into the impact of a cap on the number of non-EU skilled workers entering the UK amid concerns that some of the most talented people in the world are being locked out of the country.

Technologists and other professionals from outside the EU can enter the UK on the "Tier 2" visa but demand is now outstripping supply. 

UK businesses are forced to hire outside the EU due to a lack of skills at a local and national level ©iStock/konstantin32

A cap of 20,700 Tier 2 visas was introduced in April 2011 by the coalition government. For many years this cap went unhit but last month, for the first time ever, it was reached, making it impossible for UK businesses across a variety of sectors to recruit the people they needed. Software engineers were locked out of the country, as were doctors, nurses, teachers, accountants, solicitors and management consultants.

There were 1,650 Tier 2 visas available for June but the Home Office stopped giving them out from June 25 onwards. At the time, it refused to reveal how many visa applications it declined as a result of the cap being hit. 

However, a Freedom of Information request submitted by visa guidance startup Migreat in conjunction with Techword reveals that 1329 visa applications were refused on the basis that there were no spaces left. 

Many of the largest technology companies operating in the UK, including Google and Facebook, rely on this visa to bring in talented workers from outside the EU. Startups also use the visa to attract engineers from tech hubs like Bangalore and Silicon Valley. 

The visa allows skilled migrants to stay in the UK for up to five years.

A 2013 O2 report, The Future Digital Skills Needs of the UK Economy, estimated that 745,000 additional workers with digital skills would be needed to meet rising demand from employers between 2013 and 2017. Half way through that time frame there has been no let-up in the skills shortage.

Matt Warren, cofounder of venture capital-backed ecommerce startup Veego.com, said he was unable to hire a highly experienced software developer from Ukraine as a result of last month's cap.

"The application process is extremely time consuming and painful, so I have wasted a huge amount of time," said Warren. "Our development speed has suffered now as a result.”

It's understood at least one of the top five largest technology companies in the world was unable to bring in the people it wanted to as a result of last month's cap. The firm in question declined to comment on the matter, as did several other multinational technology companies.

Damian Kimmelman, CEO of DueDil, a database that provides information on every private business in the UK, said: “It is a huge advantage for UK companies that our visa policy allows us to hire from all over the world, and is vital that we retain that. As a tech business, we would love to employ more British workers, but in some key, highly-skilled fields - like data science - the talent just isn’t available, so we need to look abroad to fill many of these roles and grow our company. If we want to build a strong, competitive tech sector in the UK, companies like us need to be able to continue to bring in the best international talent.”

Ian Robinson, senior manager at Fragomen and a former employee at the Home Office, said the Tier 2 visa cap is likey to be hit again. 

“There is no indication that July and subsequent months will be any different,” the law firm writes in a client briefing document for its clients seen by Techworld.

Inquiry

The Home Affairs Committee, a public organisation that examines the policy, administration and expenditure of the Home Office and its associated bodies, announced last week that it is launching an inquiry into the impact of the cap, revealing that it is concerned about the cap’s impact on the UK economy. 

Specifically, the inquiry will consider: 

  • What impact has the cap of 20,700 employer-sponsored skilled migration (Tier 2) visas had upon employers? 
  • Which sectors have been particularly affected?
  • If a cap on Tier 2 skilled workers remains, what is the best way to meet the needs of the UK economy while maintaining control of the number of skilled workers coming to the UK from outside the EEA?
  • If the cap on Tier 2 did not remain, what would replace it?

"Reaching the cap limit for the first time last month sparked concerns of skills shortages,” said MP Keith Vaz, chair of the committee. “It is easy to see how this could impact on the services, sectors and small businesses who rely on skilled workers from abroad, and in the longer term impact on the economy. There are also serious concerns about the knock-on effect of the loss of the post-study work route.

“The Committee hopes to gain an insight into whether the current system is the best way to achieve the twin aims of controlled immigration that can maintain the level of skilled workers essential to providing the services we all rely on and enjoy."

Mixed messages

While the Home Office Comittee has launched an inquiry into the impact of the cap, it's also tasked the Migration Advisory Committee with exploring whether it's feasible to reduce the number of Tier 2 visas on offer. 

The MAC is proposing that the minimum salary thresholds for the Tier 2 visa are raised, meaning UK-based technology-driven firms would have to pay more to hire talent from outside the EU. 

Technology professionals working in the UK on the Tier 2 visa must currently be paid upwards of £30,000 but the MAC is suggesting the minimum annual salary requirement for the Tier 2 visa is raised by anywhere between £10,000 and £25,000.

A separate visa, known as the Tier 1 Exceptional Talent visa, exists for highly skilled technology professionals looking to enter the UK. There are just 200 of these available every year and they're issued by government quango Tech City UK.

However, earlier this year it emerged that Tech City UK gave out just seven of its 200 visas, raising questions about the effectiveness of the visa route. 

Other visas exist for technology professionals looking to enter the UK but these have been criticised for attracting the wrong kinds of people. For example, the entrepreneur visa is often wrongly-given to investors

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